Facebook braces app makers for ad crunch after iPhone switch
FACEBOOK has warned thousands of iPhone app makers that they face a brutal downturn in advertising revenues due to forthcoming privacy changes introduced by Apple.
The social media giant said around 19,000 developers that use its advertising network could see income from ads more than halve in the new version of Apple’s operating system.
IOS 14, the new software due to be released for around a billion iPhones later this year, will require apps to obtain consent for using a tracking identifier that allows advertisers to tie profiles to a particular device.
Analysts believe the majority of us- ers will decline to opt in, making targeted adverts far less accurate and valuable than they currently are.
Facebook, the world’s second-biggest digital advertiser, runs a sprawling network that allows apps such as mobile games to run adverts using its technology, a business that is worth billions to the company. It has issued a warning to app publishers, saying Apple’s changes could ultimately lead it to stop operating the network.
“This is not a change we want to make, but unfortunately Apple’s updates to iOS 14 have forced this decision. We know this may severely impact publishers’ ability to monetise through Audience Network on iOS 14 and, despite our best efforts, may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14 in the future,” it said.
“We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with more than 19,000 developers and publishers from around the globe, and in 2019 we paid out billions of dollars. Many of these are small businesses that depend on ads to support their livelihood.”
Facebook said its own apps would not request device IDs from iPhone users. Apple has said the changes will improve users’ privacy, and they still have the ability to opt in to tracking if they wish. It is also expanding its own technology for building advertising networks, which the company says preserves privacy, in iOS 14.
Last month, Mark Zuckerberg, Facebook’s chief executive, said that attempts to limit advertising could be dramatic enough to damage economic growth.
In June, advertising lobby group the Network Advertising Initiative suggested Apple’s move was motivated by financial interests, saying the iPhone maker would benefit if more apps ended up charging for services since Apple took a cut of app purchases.